Investment Banking and Capital Markets Update: Week Ended 11/28/2014 CRT Investment Banking Justin Vorwerk Head of Investment Banking 203.548.8001 jvorwerk@crtllc.com John Calcagnini Managing Director 310.954.1525 jcalcagnini@crtllc.com David Dickson Managing Director 203.548.8002 ddickson@crtllc.com Keith Sipes Managing Director 310.954.2755 ksipes@crtllc.com Chris Wallace Senior VP, Equity Capital Markets 206.569.4157 cwallace@crtllc.com
High Yield Capital Markets The high yield primary market was relatively due to the Thanksgiving Holiday. A total of 5 deals priced for 5 issuers for a global total of $2.5bn ($2.3bn/C$150mm). The secondary market held a positive tone Monday and Tuesday before market participants retired to take part in holiday activities. No data was released on weekly high yield fund flows. Leverage loan funds flows showed outflows for the beginning of the week although no official weekly report was published by Lipper. The C.S. High Yield Index 14 bounced back 10 bps to 6.40%. TIBCO Software, a Palo Alto-based provider of infrastructure and business software, priced $950mm of 11.375% sr. nts. due 21 (Caa2 / CCC) at 97.100 to yield 12.000%. The coupon came at the wide end of talk but with OID, the 12.000% yield was in line with guidance. Proceeds, along with a $2.1bn credit facility and $1.6bn equity investment, finance the LBO of the company by Vista Equity Partners. MGM Resorts, the Las Vegas-based owner and operator of resorts and casinos, priced a $100mm tap of its 6.000% sr. nts. due 23 (B3 / B+) at 100.750 to yield 5.886%. No official price talk was given for the deal. Proceeds will be used for general corporate purposes including the repayment of debt and funding a portion of development costs associated with the company s resort projects in Maryland and Massachusetts. HY FUND FLOWS ($MM) 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Source: Bloomberg HY INDICES - YIELDS (YTW) USD High Yield % Euro High Yield % 3-year Average for High Yield % 3-year Average for USD/EUR BBB % HY INDICES - SPREADS (STW) 4,000 Weekly flow, $MM 4-Wk Avg 1,000 USD High Yield bps Euro High Yield bps 3-average for High Yield bps 2,000 900 800-700 600 (2,000) 500 400 (4,000) 300 200 (6,000) 100 0 (8,000) Nov-13 Dec-13 Jan-14 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Source: Lipper, FMI, ADI Source: Bloomberg 2
3 High Yield New Issuances HY NEW ISSUES Pricing Principal Date Issuer Industry Amt ($mm) Coupon Description Maturity Call Mdy's S&P UOP Price Yield Spread Vs. Talk 11/25/2014 DHX Media Media C$150.0 5.875 Sr. Nts. 2021 NC 3.0 yr NR BB- Refi/GCP 100.000 5.875 423 Tight End 11/25/2014 Springleaf Finance Consumer Finance 700.0 5.250 Sr. Nts. 2019 NC 3.0 yr B2 B- Refi 100.000 5.250 364 Tight End 11/24/2014 TIBCO Software Software 950.0 11.375 Sr. Nts. 2021 NC 3.0 yr Caa2 CCC LBO 97.100 12.000 999 In Line 11/24/2014 CDW Technology Solutions 575.0 5.500 Sr. Nts. 2024 NC-Life B3 B+ Refi 100.000 5.500 320 Wide End 11/24/2014 MGM Resorts Resorts and Casinos 100.0 6.000 Add-on Sr. Nts. 2023 NC-Life B3 B+ GCP 100.750 5.886 370 NA HY FORWARD CALENDAR Wk of 11/24 Entrans International Transportation Equipment 250.0 Sr. Sec. Nts. 2020 NC 3.0 yr B2 B Refi Wk of 11/24 Parq Holdings Resorts and Gaming 200.0 Sr. 2nd Lien Nts. 2021 NC 3.0 yr NA NA Capex
Leveraged Loans LEVERAGED LOAN NEW ISSUES Date Amount Spread Issuance Priced Issuer Industry ($mm) Facility (bps) LIBOR Floor Maturity Ratings Price Yield UOP 11/26/2014 Equinox Fitness Gyms 150.0 Add-on TL 375 1.25% 2020 B1/B 99.000 5.330% Dividend 11/26/2014 Terra-Gen Alternative Energy 300.0 TLB 425 1.00% 2021 Ba3/BB- 99.500 5.450% Dividend 11/25/2014 ION Media Television 865.0 TL 375 1.00% 2020 B1/B+ 99.500 4.940% Refinancing 11/25/2014 Packers Sanitation Services Sanitation 355.0 TL 400 1.00% 2021 B2/B 99.500 5.190% LBO Source: LCD, ADI, Bloomberg LOAN FUND FLOWS ($MM) 1,500 Weekly Flow, $MM 4-Wk Avg 1,000 500 - (500) (1,000) (1,500) (2,000) Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Source: Lipper, FMI 4
Equity Capital Markets U.S. stocks rose for the week, capping a second straight monthly increase, as global central banks added stimulus and plunging oil prices triggered gains in consumer companies that overshadowed a slump in energy shares. The S&P 500 edged up 0.2% to 2,067.56 despite a 9.5% drop in energy. Consumer sentiment climbed to a seven-year high in November as Americans views of their financial well-being improved, according to the Bloomberg Consumer Comfort Index (COMFCOMF). Medgenics (NASD:MDGN), a biopharmaceutical company, priced its follow-on offering at $4.10, raising $21.0mm and trading up 0.7%. Proceeds fund general corporate purposes (dilution 21.3%). Revolution Lighting Technologies (NASD:RVLT), a manufacturer of fiber optic lighting products, priced its follow-on offering at $1.25, raising $10.0mm and trading down 2.4%. Proceeds fund general corporate purposes (dilution 8.8%, TEV/revenue 3.7x). NXP Semiconductors (NASD:NXPI), a global semiconductor company, priced $1.2bn of 1.000% conv. sr. nts. due 19 at a 35.0% premium. Proceeds fund general corporate purposes (TEV/EBITDA 15.3x). 125% 120% 115% 110% 105% 100% 95% 90% 85% 80% EQUITIES DJIA S&P 500 Nasdaq GLOBAL SNAPSHOT Source: Bloomberg COMMODITIES -1 Week -2 Weeks 12/31/13-1 Year 11/28/14 Value Chg. % Chg. Value Chg. % Chg. Value Chg. % Chg. Value Chg. % Chg. DJIA 17,828 17,810 18 0.1% 17,635 194 1.1% 16,577 1,252 7.5% 16,086 1,742 10.8% S&P 500 2,068 2,064 4 0.2% 2,040 28 1.4% 1,848 219 11.9% 1,806 262 14.5% VIX 13.33 12.90 0.43 3.3% 13.31 0.02 0.2% 13.72 (0.39) -2.8% 13.70 (0.37) -2.7% Oil 66.15 76.41 (10.26) -13.4% 75.82 (9.67) -12.8% 98.42 (32.27) -32.8% 92.30 (26.15) -28.3% 10-Year Treasury 2.164 2.310-15 bps 0 bps 2.320-16 bps #REF! 3.028-86 bps 0 bps 2.737-57 bps 0 bps 10-Year Bund 0.700 0.770-7 bps 0.785-9 bps 1.929-123 bps 1.695-100 bps USD High Yield (%) 6.400 6.500-10 bps 6.200 20 bps 5.810 59 bps 5.810 59 bps EUR High Yield (%) 4.520 4.620-10 bps 4.420 10 bps 4.700-18 bps 4.740-22 bps 30% 20% 10% 0% -10% -20% -30% -40% Oil Gold Silver Natural Gas Source: Bloomberg Source: Bloomberg 5
FOLLOW- FWD IPOS CVTS ONS 6 Equity New Issuances Pricing Amount Offer Discount/ Shares Market % of % Ch. Offer/ Date Issuer Industry ($MM) Price Premium (%) Offered (MM) Cap ($MM) Dilution Current 25th Nov 2014 Medgenics Inc Healthcare-Biomed/Genetics 21.0 4.10-14.2% 5.1 114.9 21.3% 0.7% 24th Nov 2014 Revolution Lighting Technologies Inc Consumer Products-Miscellaneous 10.0 1.25-15.0% 8.0 134.4 8.8% -2.4% Pricing Amount Maturity Coupon Premium Market Date Issuer Industry ($MM) Date % % Cap ($MM) 24th Nov 2014 NXP Semiconductors NV Computers & Electronics-Semiconductor 1,150.0 2019 1.000% 35.0% 11,277.1 Pricing Amount Filing Shares Exp. Market Date Issuer Industry ($MM) Range Offered (MM) Cap ($MM) 2nd Dec 2014 Histogenics Corp Healthcare-Medical/Analytical Systems 60.0 13.00-15.00 4.3 151.1 Week of 8 Dec 2014 Polar Star Realty Trust Inc Real Estate/Property-REIT 500.0 10.00-13.00 43.5 800.4 Source: Dealogic
M&A Activity SELECT GLOBAL M&A ANNOUNCEMENTS Date Target Company Acquirer Company Seller Company Industry Size ($MM) TEV/EBITDA 11/28/2014 Glentel Inc. (TSX:GLN) BCE Inc. (TSX:BCE) TCG International Inc.; Fidelity Management & Computer and Electronics Retail 627.7 10.7x Research Company; 302856 BC Ltd. 11/24/2014 Encompass Home Health, Inc. HEALTHSOUTH Corp. (NYSE:HLS) Cressey & Company, LP; Thoma Bravo, LLC Healthcare Services 750.0-11/24/2014 Gardew ine Group Inc. Mullen Group Ltd. (TSX:MTL) TriWest Capital Partners Trucking 152.6-11/24/2014 Tall City Exploration LLC, 14,000 Net Acres of Leasehold located in Reagan County, Texas American Energy - Permian Basin, LLC Tall City Exploration, LLC Oil and Gas Exploration and Production 440.0 - Source: S&P CapitalIQ 7
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